If your business requires using heavy machinery all the time, every contract poses a new challenge in sourcing the right piece of equipment to get the job done. Most contractors often consider the option of buying equipment which they can use anytime there is a new project. However, buying new equipment is a significant investment.
When a company does not have the financial resources to buy, the next best option is to rent instead. Renting is convenient because companies like Plant Hire Preston offer some of the best selection of well-maintained and high-quality pieces of equipment suitable for all kinds of rugged applications. But when is renting better than buying? Are the savings worth considering over owning equipment which you can use for a long time? Here are factors that will help determine whether renting is a more cost-effective solution than buying new equipment.
Consider your company’s financial capacity
The first thing every contractor needs to consider is whether or not funds are available to buy new equipment. When the answer is no, the convenient route to take is to contact a rental company for a short term lease. But if projects are consistent and you need to rent equipment all the time, the cost could certainly add up, and, in the long run, buying new machinery may become the better option.
If your company has decided on buying equipment rather than renting, some financing options could work if funds are limited. First, there are high-quality used machines for sale. Buying used machinery is an alternative to buying brand-new equipment, but without the high cost. Another option is to buy the equipment through an installment plan. Nevertheless, you still need to carefully weigh in the interest rate that will be charged when you opt to finance a purchase.
How much does it cost to own versus rent equipment?
Calculating the cost of owning equipment versus renting the same machine for the same period of time will help you determine which is the more cost-effective option. When buying new equipment, apart from the cost of the machine, you also need to factor in maintenance, insurance, licenses, and fuel. On the other hand, renting means, you are paying for the rental fee depending on how long the agreement is as well as other charges such as delivery or pickup costs. After obtaining the estimate, you can compare which option is cheaper. Nonetheless, there are other external factors which you also need to take into account.
One of the factors that you will not be able to anticipate when you do a cost analysis is how often you will be using the equipment. Remember that when a machine is out of commission, you still need to spend on storage and maintenance.
In conclusion, renting is, in fact, a cheaper option when you are looking for equipment to use for short-term projects that are few and far between. For pieces of equipment that you need to use all the time, buying may be a more economical solution.